enters strategic era

By Lawrcnce R. Gavin President Ace Hardware CorDoration

industry associations. Studies show that consumers look for durabilitv before price at the top of their priority list. They are also very conscious of energy conservation.

Today's d-i-yers are second generation "how-to" enthusiasts. They are upscale and willing to tackle more complex projects. They are also more willing to purchase quality, both in redoing previous construction as well as improving amenities. The problem of economy construction has increased demand for quality d-i-y merchandise. Meanwhile many of today's consumers are upgrading their homes with higher quality items to reflect their improved financial status.

Baby-boomers are the largest demographic segment of the market. These 70 million Americans, born between 1946 and 196/, are grown up now. By the end of the decade, they will account for more than half of all consumer purchases. Developing ways to reach this group is about to become

Story at a Glance

Home improvement to grow 8.5%...d-i-y will increas6 12.7o/o ...baby boomer will make 507o of consumer purchasgs by 1990...challenge of new mar. kets will bring casualties.

imperative for retail success, and for many retailers, for survival.

By 1990, nearly every other household in America will be headed by a baby boomer. These are households with money to spend. Already 25s/o of this generation makes at least $35,000 annually.

Our challenge is how to understand what motivates this special group of consumers. Unless we do, we will find it impossible to forecast the coming years from a consumer marketing perspective.

The baby boomers need to be stimulated, not only in merchandising content, but in store design, merchandise presentation and advertising. Retailers, wholesalers and manufacturers that follow the moving target as this group matures will be the great winners of the future.

Looking at the present, members of our industry are finding that it's no longer just business as usual. Unlike recent years where growth was automatic, there are only two ways for a company to generate more real growth: do more business with existing customers or take customers from the competition. Taking customers from the competition means that there are going to be some casualties.

Suppliers, wholesalers and retailers who join together to meet the challenges in the marketplace, will all come out on top. Those who are aggxessive and capitalize on these combined strengths will have an outstanding future.

Edward Hines Lumber Co., Chicago, Il., has sold six distribution centers including one in Tulsa, Ok., to Hinco CorP., an affiliate of the Hudson GrouP, New York City, for $7.9 million.

Hechinger Co. has opened two warehouse stores in Rochester, N.Y.. .Cox Lumberhas oPened a 15,000 sq. ft. unit in BaYonet Point, Fl.. .Home Quarters, Virginia Beach, Va., will hold a grand opening for its third store in Columbia, S.C., early next Year.

Lowe's has purchased a store site in Sarasota, Fl., for $1.15 million and opened a building materials consolidation site in Charlotte, N.C.. . .The Home Depot has opened two units in Jacksonville, Fl., and one at Kendall (Miami), Fl..

G & M Building Center is the new name for Smilh Building Center, Skiatook, Ok., recentlY purchased from Ed Smith by Virgil Cardner and Larry Moore; Smith continues ownership and operation of Smith's Grand Lake Lumber Co. in Ketchum, Ok..

Goldston Lumber Co., Wake Forest, N.C., has opened Goldston's Building Supply. . Coche Lumber Co. has leased a 26,W sq. ft. location in TamPa, Fl.. Wright Lumber Co., Clinchburg, Va., had $200,000 in damage in a recent fire...

Bobby Levy has sold Moody Lumber, Moody, Tx., to J.L.H. Inc. which has changed the name to Moody Lumber and Hardware; a remodeling is being completed under the direction of J. L. Hitzfelder,mgr....

Kempsville Building Materials, Virginia Beach, Va., is observing its 3lst anniversary. .lAhile River Hardwood, Fayetteville, Ar., just celebrated its seventh anniversary.

Piedmont Forest Products, formed by Tinity Forest Industies in conjunction with former American Forat hoducts mgr. Joe Contestabile, is new in Hurst, Tx. Wood Right is a new div. of Emwood Lumber Co. (Closter, N.J.) opened in Albermarle, N.C., Rich Inskeep, m8r..

The Crystal Springs, Ms., office of Klumb Lumber Co. has been moved to Jackson, Ms. Berson Lumber Co., Pawhuska, Ok., recently celebrated its 69th anniversary...

Tetnple-Eastex Inc. is building a $18 million gypsum wallboard facility at Fletcher, Ok.; completion of the 220,000 sq. ft. plant is set for June. .United Cootings, Inc., has opened a new 52,000 sq. ft. mfg. plant in Ennis, Tx..

The Notionsl Wood Window & Door Associationhas added a stile and rail door div. . .

Weyerhaeuser, which has acquired CanterBoard, Inc., Thomasville, N.C.,for an undisclosed sum, will begin a 24o,ffi sq. ft. addition to its Moncure, N.C., fiberboard plant early in '86 with a Sept. 1987 completion date.

Macklanburg-Duncon, Oklahoma City, Ok., is buying Industrial Cement Co. of Texas Inc., Fort Worth. and Industrial Rubber Cement, Inc., City of Industry, Ca.. Pasco Building Systems, which has a plant in Columbus, Ga., and York Manufacturing Co.,both units of Gifford-Hill, /nc., Dallas, TX., have been acquired by Ceco Industries, Oak Brook. Il.. .

Sv,ain Building Materiab, Leland, Ms., has sold its Houston, Tx., facility to a company outside the lumber industry. All Woods/ Schroeder, /nc., Houston, Tx., is establishing a distribution warehouse in Denver, Co..

GAF has acquired more than '7Vo of Union Corbide. .Inrernational Paper Co. will lay off an undetermined number of salaried u'orkers and offer early retirement to 1000 . . Owe ns-Co rn ing is buying Arntco ./nc.'s aerospace and strategic materials group for $415 million.

Loubiana-Pacific Corp. plans medium density fiberboard plants for New Waverly, Tx., and Urania, La., plus a Waferwood plant in New Waverly. .Champion International Co4p. will close building products plants in Lumpkin, Ga., and Vance, Al., midmonth. ..

Housing starts leaped I0.8To in Oct. (latest figs.) to an annual rate of 1,760,000 units, the highest in 6 months. . Single family homes were at a rate of l,l23,m units, a 15.890 increase; multis at 637,m units were up only 2.990. the South contributed to the national increase with a 14.7s/o Nke. some analysts are confident that lower mortgage rates and a stronger economy will bolster starts for several months although permits were off 1,2010 at I,675,W units...

E EXPECT 1986 to be a pretty good year for wholesalers of building materials in our area. Our conservative estimate is that distributors' sales increases over 1985 should be around 1090. This is without expecting any significant price inflation.

This increase should come from several directions: first, from modest improvement in the overall economic strength of our region. Manufacturing should go up a bit; agriculture should hold steady, even if not at a particularly healthy level; mining and natural resource income will be down, offsetting some of the earlier growth.

Second, distributors who have been through the early '80s are generally stronger and better organized. They are doing a better job and will continue to improve. There is not much complacency or fat left. Distributors are offering dealers more value at better prices. Alert dealers recognize this and are responding by giving wholesalers a better shot at business that has been going through other channels.